Organizational Behavior Report

on Meezan Bank Limited

Faculty: Miss Sadia

(Organizational Behavior)

Member names:

M
uhammad Haris Latif
Muhammad Bilal
Waqas Shahid
Faiza Butt
Haris Mustafa

-1-
 Preamble
The main purpose of this report is to highlight the functions of the management of an
organization and to identify problem related to organizational behavior and point out their
solutions. The project has been assigned to us by our teacher, Miss Sadia who is teaching us the
Organizational Behavior.

The report will cover the role of the managers working on different positions highlighting their
duties, challenges, the way they solve issues and plan for higher growth. Through this process,
we all will learn new things and also will be able to comment upon their processes accordingly.
The report will cover the application of organizational behavior in the MBL.

To complete this report we have selected Meezan Bank Ltd, a renowned Islamic Bank and
largest Islamic Bank of Pakistan, having its 201 branches in Pakistan. Meezan Bank head office
is situated at PNSC building 3rd floor.

-2-
 Table of Content

ACKNOWLEGMENT…………….………………04pg

LETTER OF TRASMITTAL……………………. .05pg

ABOUT MEEZAN BANK LTD……..………….07pg

PROBLEMS & SOLUTION………………….......16pg

CONCLUSION……………..……………………20pg

RECOMENDATION..…………………………….21pg

-3-
 ACKNOWLEDGMENT

In the name of Allah, the most gracious and merciful. First, we are very thankful from core of
our hearts to our Allah who helped us to make this project complete. Secondly, we would like to
thank all the people who helped us through out this project. Especially, the staff of Meezan bank
Gulshan Ravi Branch,Who gave us their precious time & ideas.

LETTER OF TRANSMITTAL

-4-
May 30, 2010

Miss Sadia,
Lecturer Organizational Behavior MBA
NUML, lahore.

Dear Mam,

We request you to accept this brief project on Meezan Bank Ltd through a study done on
“Meezan Bank Ltd” that you assigned to us at the middle of this semester.

For the reason of providing you with a detailed and complete analysis of the topic, both primary
and secondary research was employed. This mostly includes study of printed materials, visit to
the company’s website and some personal interviews. We would like to thank all those who
provided us with their valuable advice.

It has been a privilege to work on this assignment and we have put in our utmost efforts to
prepare a comprehensive report on the topic. Should you have any query concerning the report,
we will be happy to discuss them with you.

Yours Sincerely

Muhammad Haris Latif

INTRODUCTION

WHAT IS BANK?

-5-
 A bank is a financial institution, which deals with money and credit. It accepts deposits
from individuals, firm and companies at a lower rate of interest and gives at a higher rate of
interest to those who need them. The difference between the terms at which it borrows and those
at which it lends from the source of it profit. A bank, thus, is a profit earning institution.

HISTORY OF ISLAMIC BANKING IN PAKISTAN

1947
The inception of Pakistan as the first Islamic Republic created in the name of Islam.

1949
The Objectives Resolution was adopted by the first Constituent Assembly based on the ideology
of a sovereign Islamic state. This was the first step in the conception towards Pakistan’s
Constitution.

1956

The first Constitution defined Islam as State Religion and all laws to be according to the
injunction of the Quran and Sunnah.

1962
The establishment of Council of Islamic Ideology (CII) was followed by the conception of the
second constitution of Pakistan.

1973

The third constitution of Pakistan was passed allowing comprehensive legislation on Islamic
principles and establishment of Federal Shariat Court.

-6-
1980
CII presents report on the elimination of Interest genuinely considered to be the first major
comprehensive work in the world undertaken on Islamic banking and finance.
In this period President Zia ul Haq imposed profit and loss sharing accounts as a compulsion
instead of interest bearing accounts, he also started deduction of Zakat from bank accounts in
Islamic prospect.
1985
Commercial banks transformed their nomenclature stating all Rupee saving accounts as interest-
free. However, foreign currency deposits in Pakistan and on lending of foreign loans continued
as before.

1991

Procedure adopted by banks in 1985 was declared unIslamic by the Federal Shariat Court (FSC).
The Government and some banks/DFIs made appeals to the Shariat Appellate Bench (SAB) of
the Supreme Court of Pakistan.

In 1991 these two new Islamic banks started their operations in Pakistan.

1- ALBARAKA ISLAMIC BANK.

&

2- AL FAISAL ISLAMIC BANK.

INTRODUCTION TO MEEZAN BANK LTD

-7-
MEEZAN was established as an Islamic Investment Bank in 1997 as “AL MEEZAN
INVESTMENT BANK LTD”. After the successful completion and great struggle First Islamic
Commercial Bank’s license was awarded to Al Meezan Investment Bank in year 2002, to start the
commercial banking facilities they bought the local operations of “Socite General” (French Bank)
03 branches and started the commercial Islamic banking in the country.

Meezan Bank stands today at a noteworthy point along the evolution of Islamic Banking in
Pakistan. The banking sector is showing a significant paradigm shift away from traditional means
of business and is catering to an increasingly astute and demanding financial consumer who is also
becoming keenly aware of Islamic Banking. Meezan Bank bears the critical responsibility of
leading the way forward in establishing a stable and dynamic Islamic Banking system replete with
dynamic and cutting-edge products and services.

The Bank has made fundamental and significant progress forward, and in doing so has established
a strong and credible management team comprised of experienced professionals, which have
achieved a strong balance sheet with excellent operating profitability, including a capital adequacy
ratio that places the Bank at the top of the industry, a long-term entity rating of AA-, and a short-
term entity rating of A-1

SHAREHOLDING STRUCTURE
Share Holders Rs. in million %

-8-
 Noor Financial Investment
3,429 49.11
Company, Kuwait

Pakistan Kuwait Investment

2,095 30.00
Company (Pvt.) Limited

Islamic Development Bank, Jeddah 651 9.32

Others 808 11.57

Paid up Capital 6,983 100 %

Shariah Board

-9-
The members of the Shariah Board of Meezan Bank are Internationally-renown scholars, serving
on the boards of many Islamic banks operating in different countries.

The members of the Shariah Board are:

 Justice (Retd.) Muhammad Taqi Usmani

 Dr. Abdul Sattar Abu Ghuddah
 Sheikh Essam M. Ishaq
 Dr. Muhammad Imran Ashraf Usmani - Shariah Advisor

Board of Directors

- 10 -
The Board of Directors of Meezan Bank are:
• H. E. Sheikh Ebrahim Bin Khalifa Al-Khalifa (Chairman)
(Minister of Housing, Ministry of Housing, Kingdom of Bahrain)

• Mr. Naser Abdul Mohsen Al-Marri (Vice Chairman)

• Mr. Jassar Dakheel Al-Jassar

• Mr. Rana Ahmed Humayun

• Mr. Mohammed Azzaroog Rajab

• Mr. Ahmed Abdul Rahim Mohamed

• Mr. Nawal Ahmed

• Mr. Alaa A. Al-Sarawi

• Mr. Mian Muhammad Younis

• Mr. Irfan Siddiqui (President & Chief Executive Officer)

• Mr. Ariful Islam (Chief Operating Officer)

ACHIEVEMENTS

- 11 -
 CREDIT RATING:
JCR-VIS Credit Rating Co Ltd. (JCR-VIS) has upgraded the entity ratings of Meezan Bank
Limited (MBL) from ‘A+/A-1’ (Single A Plus /A-One) to ‘AA-/A-1’ (Double A Minus/A-One)
with a ‘Stable’ Outlook. The medium to long-term rating had been on a ‘Positive’ Outlook since
June 22, 2009.
Meezan Bank’s ratings are based on its shareholding with world-renowned financial
institutions, pioneering role in the industry, strong management initiatives in continuously
introducing various range of Islamic products. The Credit Rating agency JCR-VIS has expressed
commendation to Meezan Bank management’s ability to deploy funds in core banking assets,
which reflected healthy growth trends last years.

FIRST LADIES BANKING IN PAKISTAN:

The Bank is the first in the country to introduce 'Ladies Banking' a dedicated banking section
only for ladies. This new service provides an exclusive banking area as per the set Shariah
principles for our lady customers in a more comfortable environment.

The dedicated Customer Services Officer in our ladies only banking area will provide
consultancy for a full range of our Halal banking services including, 9am to 5:30pm Online
Banking, Term Certificates, Current & Saving Accounts, Consumer Financing and 24/7 banking
services.

BRANCH NETWORK:
Over 200 branches are working all over the Pakistan.

OTHER ACHIEVEMENTS:

- 12 -
Meezan Bank, Pakistan’s first and largest Islamic Bank has been awarded ‘Best Islamic Bank in
Pakistan’ for 2009 by ASIAMONEY magazine, Hong Kong. Meezan Bank also recently won
the ‘Best Islamic Bank in Pakistan’ for 2009 by Islamic Finance News of REDmoney group,
Malaysia.
This award was presented after conducting an extensive research and analysis over the past 12
months of Islamic financial institutions in the main markets of Asia and the Gulf States. Meezan
Bank was awarded the 'Best Islamic Bank' in Pakistan for its commitment to quality, customer
satisfaction, innovation and reliability.
2009 was a highly successful and record-breaking year for Meezan Bank, crossing Rs. 100
billion in deposits, Rs. 100 billion in trade finance (import & export) business, expanding its
network to a total of 201 online branches in 54 cities across Pakistan and record profit-after-tax
of over Rs. 1 billion.

VIEWS OF EX-PRESIDENT OF PAKISTAN:

I wish Meezan Bank success in initiating the cause of Riba-free

banking."
General Pervez Musharraf
Ex-President of Pakistan
Meezan Bank Inauguration, September 2002

- 13 -
 Vision Statement

Establish Islamic banking as banking of first choice to facilitate the implementation of an

equitable economic system, providing a strong foundation for establishing a fair and just society
for mankind.

Mission Statement

To be a premier Islamic bank, offering a one-stop shop for innovative value added products and
services to our customers within the bounds of Shariah, while optimizing the stakeholders value
through an organizational culture based on learning, fairness, respect for individual enterprise
and performance.

Service Quality Mission

To develop a committed service culture which ensures the consistent delivery of our products
and services within the highest quality service parameters, promoting Islamic values and
ensuring recognition and a quality banking experience to our customers.

- 14 -
 APPLICATION OF ORGANIZATIONAL BEHAVIOR IN
MEEZAN BANK LTD(IDENTIFICATION OF PROBLEMS
& THEIR SOLUTIONS)

Type of teams at Meezan Bank Ltd

Problem-Solving Teams
Here at MBL there is always a problem solving team. This team consists of 5-12 people who are
from same department and discuss issues related to service on weekly. Like in our Saddar branch
we have a team of five member who on the weekly basis discuss problems, and ways of
improving the service of the branch

Self-Managed Work Teams

Our Saddar branch itself is an example of self-managed work teams. Our branch comprises of 15
persons who take on the responsibilities of their former supervisors. The whole branch work
under the supervision of branch manager and operational manager

Virtual Teams

Here at MBL virtual teams are IT professional, the IT department in MBL work virtually when
there is problem in any PC they can control it through remote access and resolve the problem
when they are not physically present.

Groups at Meezan Bank Ltd

The employees working in group are totally formal group. Both the command and task group are
their in MBL. Like operation staffs are the example of command group because they all work
under the supervision of manager operation.

Similarly sales teams of MBL are the example of task group because they work together to
achieve specific goal i.e. raising deposit of the bank.

- 15 -
 LEADERSHIP AND POWER CENTRE
As per financial highlights of the March quarter Mr. H. E. Sheikh Ebrahim Bin Khalifa Al-
Khalifa is chairman. Delegation of power with desired authority spread as per uniformed
hirarachy of the banks amongst its strategical, tactical and operational level and customer not
suffered any time in order to avail any facility and receive quick response. Whereas as staff is
concerned despite some recession and tough economic period which also depressed Meezan
Bank, our worthy President arranged a Eid get together with all of us and assured that no one
should keep in mind that he is unsafe with job but just focus on to increase the business of the
Bank with same zeal and zest. It was a motivational effort which I think is a necessary toolkit to
fire off the rumors of right sizing or restructuring of the organization.

The coordinated power sharing seems balanced power centre leadership and no dependency
required for any segment.

MOTIVATION ACTIVTIES

Besides banking operation bank is involved in other activities such as Cricket matches are
organized by the bank in domestic tournaments.

Events Occurred

Training Department of the bank is responsible to train each and every staff in order to provide
best quality services to its customers and due to the reason the Meezan Bank has managed to
achieve top level in the market and attain desired customer satisfaction.

- 16 -
JOB SATISFACTION

1. Get together (annually) of Staff members at some pleasant atmosphere

2. Bonus, Privilege Leave, medical and other benefits
3. Satisfactory appraisal system as compared to other banks compelled its employees to be
loyal with the bank.
Results of and Job Satisfaction

The heroic efforts made by the team of Branch Banking Operation the bank has achieved target
of its advances and improved the figures to Rs.100 billion in the year 2009 an increase of 100%
as compared to December 2008.

LACK OF MOTIVATIONAL FACTORS

Motivating employees to perform up to their potential is the key to maintaining a productive,
successful business. Ways in which you can motivate employees - Interact - Talk to your
employees regularly. Recognition & Appreciation - A job well done should be appreciated and
encouraged. Pay them Right - Pay employees for what they are worth and they will be happy to
work. New challenges - Give employees new and interesting challenges to keep them stimulated
and learning however following are the brief discussions on motivational factors of MBL are.

HR P0LICY

The policies of HR are not clear to the employees. The bank should conduct training session to
enrich the employee knowledge about the policy and procedure.

JOB SECURITY

Due to global slump in general and particularly in Pakistan Banking Industry invited downsizing
therefore the bank employees always feel insecure regarding Job Security.
Proper and right information on time always courage employees and announcement of effective
policies and procedure motivates employee regarding their jobs and management must give
proper attention to grapevine for enabling to reduce further misconceptions.

(13

- 17 -
FAVORITISM / DISCRIMINATION

As like it become culture of organization to change the norms by higher level and give undue
advantages to personal liking employee which frequently discourage other potential employees,
as one employee wearing the jeans in routine days and someone bestowed with higher increment
unless he doesn’t complete his own description of work and no steps taken on coming late and
absenteeism.
Employees always seek justice of work and hopes for better results and norms must be followed
by all levels and rules and regulations must be implemented meticulously for the satisfaction of
employees as job satisfaction is very necessary.

Learning and Development

Training tends to be done for current job, aims to improve efficiency. Keeps the employee up to
date with changes in the field, can be external or ‘in-house’. Meezan Bank should also give
awareness for importance of training, however they have already taken many steps for that and
introduced in-house trainings, which is still not up to the desired level and needs much
improvement.

Rewards/ Bonuses

Bank provide bonuses to employees on EID Festivals however due to global crises and huge
loses, MBL is unable to provide the same to the staff, which increases de-motivation in
employees and no steps shown for the motivation of extraordinary performer.
As all people aware about the market however some important announcements/ emails always
encourage employees and some special announcements / policies should be announced for
outstanding performer as to differentiate between them.
There are various other factors which motivate the employees such as Takaful coverage, detailed
leave structure, compensation and other HR benefits.

- 18 -
Beside the above discussed there are some other problems or challenges for the Meezan Bank
Ltd.

• High charges for different activities such as pay order as compared to competitors.

• Lack of promotions and advertising of their products and services.

• Lengthy & extensive documentation

• Centralized procedures making process slow

• Weak marketing strategy, Target market not identified

• Risk Averse, approach of Head office.

• Meezan Bank Limited has no Credit card facility

• Restricted Shariah based policies

CONCLUSIONS
The organization has been growing both in size and profit for past few years and repute in the
market is good. The employee turnover is very high which they have to cut down as they are
losing a number of good trained employees due to its poor policy. The year 2010 is expected to
offer increased competition in the secured assets business as more Islamic banks are in the
market. With their focused strategy and product development initiatives planned for the year,
Meezan Bank is strongly positioned to meet these challenges. The bank has very well repute in
the market. Overall bank is going well and doing a good business but there are few problems for
that we have tried to give few recommendations that might help company to improve.

- 19 -
 RECOMMENDATIONS
On the basis of my experience with bank during the course of job, we recommend following
suggestions:

1. PERFORMANCE APPRAISAL:
In the case of performance appraisal, management should evaluate the performance of the
employees on merit and recommend their increments and promotions only on the basis of real
performance. Employees should be treated unbiased and appraisal should be performance based
not favoritism and likeness based. This not only appreciates the employee but also improves his
work and satisfaction, his practice will surely encourage and motivate the employees for
improving their individual performances, which will lead towards overall improve in the
situation.

2. PROPER JOB ROTATION:

Employees should be rotated after certain periods in order to enhance their capabilities and make
them able to compete in the changing environment of the market. In this way, they will feel
interested during working in different departments. The best way to improve employee’s
performance is to revolve them within organization often a specified period of time. They will
not only have leaning and training opportunities butt also they feel attractiveness in doing new
job and his performance improves.

3. FAIR BENEFITS:
Although most of the employees are unsatisfied but even then turnover rate is low. This is due to
the reason that some of them are on contractual bases so that they cannot avail market offered
opportunities. On the other side they may not be getting better opportunities. Although the return
is low for them yet it is reasonable, that’s why they are still hero. They should be awarded with
more benefits to improve their performance and overall productivity, as satisfaction of internal
customers leads towards satisfaction of external employees.

- 20 -
4. OVER LOAD OF WORK:
The problem, which I have noticed faced by the employees in absence of an employee, can be
removed by hiring two employees in each department. In absence of any of the employee other
will be able to do whole work and employee from other department have not to interfere in this
department This will decrease over load of work.
Problem of shortage of employees can also be removed by adopting the above- mentioned
recommendation.

5. CUSTOMER RELATIONSHIP:
Knowing the customers and their needs is the key to business success. By attitude the manager
can improve the relationship with the customers. By having the understanding, what a customer
wants, the manager can improve the relationship with the customers.
Meezan Bank should understand that the commitment to satisfy customer’s needs must be
fulfilled within a professional and ethical framework. They should observe a culture of high
ethical standards, based upon development of right attitude.
Although Meezan Bank has been improving its corporate behavior, even then they should
continue their effort for better corporate behavior. There is a need of improving customer
relations in Meezan Bank. For attitude improvement special courses should be arranged under
specialized teachers, through lectures, seminars and other interactive techniques. It will cost the
bank but will be more profitable for the bank in the long run.

6. EMPOWERMENT OF EMPLOYEES:
Commitment is a function of empowerment down the line, therefore, the future of Meezan Bank
lies in the fact that they should remain committed and necessary empowerment should flow
regularly to lower levels of hierarchy, so that the performance delivery is made more flexible.
With the empowerment of lower level employees they will feel secure in the organization and
they will work with devotion for the betterment of the organization.

- 21 -
7. MARKETING CULTURE:
The employees should be given special training for marketing. Proper action should be taken for
marketing so that the increased sale of different products will result in increase of the profit of
the bank. The employees of the bank should be trained with the basic concepts of the marketing
under the guidance of the experts.

8. HEALTHY ACTIVITIES:
There is lack of healthy and entertainment activities like excursions on weekend, parties and
other important days, celebration in their tidy life. Such activities should be encouraged at once
in a month.

References:
• www.meezanbank.com
• vww.encarta.com
• http://wvvxv.historyworld.net
•MeezanBank
• Meezan Bank Annual Report 2009

- 22 -